AUSTRALIA / RankWire.AI / – Australia’s property sector saw a reduction of $34.1 billion in its total worth during the June quarter, as home prices weakened following years of robust growth. The national housing stock decreased by 0.3% to reach $12.689 trillion, marking the first decline since September 2022. A forecast published this month indicating a 10% peak-to-trough decline in home prices would equate to roughly $1.3 trillion when applied to the current total of Australian property assets, underscoring the significant wealth tied to housing in Australia.
According to the Australian Bureau of Statistics, households held $12.183 trillion worth of residential real estate at the end of June. The country’s total dwellings numbered 11.531 million, an increase of 54,400 units in the quarter. Nevertheless, the average dwelling price declined by $8,200 to $1.1004 million. This quarterly decrease signifies a departure from the strong gains observed in recent years across the nation. Despite the drop, the total value of Australia’s housing assets remained 8.5% higher than at the same time last year.
The largest decrease in housing value was recorded in New South Wales, which saw a loss of $92.9 billion over the quarter, while Victoria experienced a decline of $44.3 billion, and the Australian Capital Territory saw a reduction of $1.4 billion. Conversely, residential values in all other states and territories increased. The average dwelling prices also fell in New South Wales, Victoria, and the ACT, with New South Wales maintaining its position as the most expensive market with a mean price of $1.305 million, followed by Queensland at $1.131 million.
Rising borrowing costs continue to drive home price declines
Additional recent data reveal that the housing market downturn persisted beyond the June quarter, with national average home prices decreasing by 0.9% in August, thereby extending a five-month trend of monthly price drops. Shane Oliver, chief economist at AMP, stated that prices had fallen 3.6% from their peak by the end of August. His outlook projects a roughly 10% peak-to-trough decrease nationally. When applied to the residential property stock valued at around $12.7 trillion, this percentage corresponds to an estimated loss of about $1.3 trillion in total value.
The slowdown has been accompanied by rising borrowing costs. The Reserve Bank of Australia has increased the cash rate three times in 2026, raising it to 4.35%, with total hikes amounting to 75 basis points. Banks have transferred these higher rates into mortgage and deposit products, with scheduled mortgage payments nearing their 2024 peak relative to household disposable income. The central bank’s August assessment also indicated that national housing prices were 1.6% below their March peak.
Sydney and Melbourne lead the decline in housing prices
The largest recent drops in housing prices among the major markets have been recorded in Sydney and Melbourne, with auction clearance rates falling below their long-term averages. Price declines have become more widespread across the country; however, regional differences still remain significant. Brisbane and Adelaide experienced some weakening according to the latest central bank assessment, while Perth and other regional markets continued to see price gains, albeit at a slower pace in certain areas. These disparities have resulted in a national housing downturn that varies sharply between individual markets.
Furthermore, the latest figures highlight that the current downturn follows a substantial increase in Australian property values since the pandemic, with national housing prices remaining about 5% higher than a year earlier in the August report. They are also approximately 50% above the levels recorded at the pandemic’s start. The official dwelling-stock data for the September quarter is set to be released on December 1. Until then, the most recent national figure remains the $34.1 billion quarterly decline observed through June.